Information Communication Technologies

Table of Contents

1. Acronyms and Abbreviations

2. Introduction

3. Types of Information and Communication Technologies and its impact on management

4. The impact of ICT in international Companies’ strategies

5. The impact of ICT in international Companies’ organisational structures

6. How does ICT ‘reduce’ negative environmental impacts?

7. Conclusion

8. Table 1: Mechanistic (formalised) and Organic (decentralised) organisational structures

9. Figure 1: Information systems in relation to other business departments

10. Figure 2: A model for implementing different resource use systems (a model for change)

1. Acronyms and Abbreviations

Information (Communication) Technologies - is the computer and associated software that are used to receive, process, store, transmit and output data and information, including text, sound, graphics, and video. However, in a broader view, it consists of computers, networks, satellite communications, robotics, videotext, cable television, electronic mails, and other automated equipments. At the lowest level there are servers with operating systems, which have installed database and web serving software, which are than linked to other software and users via network infrastructures, who have their own hardware operating systems and software (Answers, 2008).

Enterprise Resource Planning (ERP) is a software which integrates a variety of business functions that has the potential of covering the entire value chain of activities, (manufacturing, logistics, distribution, inventory, invoicing) under a unified technological platform. (BPC, 2008)

Data Access and Analysis (DAA) is resource use system that provides easy access to company data, which permits analysis and identification of large volumes of data to make information available across functional boundaries and hierarchical levels in the organisation. It consists of Data Warehouses allowing access to Database Marketing, Statistical Sales Analysis tools and other departments of the Company (Poulymenakou at al, 2002).

Process Support and Improvement (PSI) is supposed to guide improvements in the content and context of the business operations in quality control, production, logistics, sales, distribution, customer care and services (Poulymenakou at al, 2002)

Information synergies (INS) Shows the effect that IT/ICT can play to increase the communication between-person or between-group individuals within the organisation. In other words shows the performance gains that result when IT/ICT allows two or more individuals or subunits to pool their resources and cooperate/collaborate across roles, units or subunit boundaries (Dewett & Jones, 2001).

Information efficiencies (INE) is the ability to gather date and analyse them leading to cost and time savings that result when IT/ICT allows individual employees to perform their current tasks at a higher level, gain additional tasks, and expand their roles within the organization (Dewett & Jones, 2001).

Abstract

The essay will firstly describe some of the types of Information Communication Technologies (ICT) and its general impact on management, secondly elaborate the effect of ICT in International Companies’ (IC) strategies, thirdly elaborate the effect of ICT in ICs’ organizational structures, and on the way it will elaborate how can all this types of ICT as alternative resource-use systems impact the long-term wealth, well-being and productivity of ICs, and finally how ICT can help ICs operate in a more environmentally accepted way.

2. Introduction

The Business environment is characterized by increasing competition, sudden changes, and transformation in firms and market relationships due to innovations in products and services, market structures, and technology, as well as industries, and national boundaries (King & Sethi, 1999). In addition, the traditional protection between the firms and its environment, including time, people, and geography are reduced, leading to greater interdependence between the firms and its environments (King & Sethi, 1999). Similarly, governments are increasingly putting pressure in International Companies’ strategies to perform in compliance with their environmental policies and standards.

Technology in general, and Information Technology (IT) or Information Communication Technology (ICT) in particular (which are often inextricably linked and, since it has become conventional to do so, the rest of this essay will mainly refer to them jointly as information communication technologies) are seen as critical forces in this transformation of competition, where International Companies (IC) have to rethink their strategies and organizational structures in response to this new environment (King & Sethi, 1999).

However, still great majority of companies are not revolutionary, in their organizational strategies or structures. They are not truly aligned to the fast changing world outside. Indeed, a survey conducted in USA by the Gartner Group indicated that about 40% of ICT projects failed and that, on average, companies spent $1 million a year on unsuccessful projects, on top of wasted professional resources that could not be easily quantified or measured (Duh et al, 2006). The difficulty remains to fit Information Communication Technologies (ICTs) with the overall ICs’ strategy and organizational structure. So, proper responding with the strategy and structure is a must for developing an effective ICT strategy, which should fit with the overall organization's vision, which if otherwise will cause a constant conflict (Colleen & Robert, 2006).

Thus, this essay will elaborate how ICs will be able to enhance the long term productivity by better integrating alternative resource-use systems, such as information communication technologies, to their strategies and organizational structure with acceptable environmental impacts.

3. Types of Information and Communication Technologies and its impact on management

This section will cover mainly ICT, which is achieved through technologies that are meant to improve the efficiency and effectiveness of business operations (Poulymenakou at al, 2002).

Let us start with Data Access and Analysis (DAA) as resource use system that provides easy access to company data, which allows analysis and identification of large volumes of data to make information available across functional boundaries and hierarchical levels in the organisation. It consists of Data Warehouses permitting access to Database Marketing, Statistical Sales Analysis tools and other departments of the Company (Poulymenakou at al, 2002). Provided through DAA technologies, Management Decision Support (MDS) systems, on the other hand, support managers on decision making process with scenario evaluation, and monitoring of strategy implementation by handling largely unstructured, open-ended questions about unexpected future events (Poulymenakou at al, 2002). Similarly, Process Support and Improvement (PSI) is supposed to guide improvements in the content and context of the business operations in quality control, production, logistics, sales, distribution, customer care and services (Poulymenakou at al, 2002). Enterprise Resource Planning (ERP), on the other hand, is software which integrates a variety of business functions that has the potential of covering the entire value chain of activities, such as manufacturing, logistics, distribution, inventory and invoicing under a unified technological platform. (BPC, 2008).

The above description of the different impacts that resource use systems may have in IC, is cumulatively shown below in the figure 1, which hopefully will make the entire complex-picture much easier to understand:

Figure 1 : information systems in relation to other business departments ( Source^[1] )

illustration not visible in this excerpt

The figure shows that information systems may integrate all parts of a business, such as manufacturing, human resources, planning, marketing, sales and far more. It evolves in response to complexity as more business departments need to be supported by a common information system. It tends to integrate all company departments and functions onto a single computer system, which will allow companies to standardize their operations, reduce data discrepancies between units, and implement best practices, as a result it shift its attention to external factors like their customers, partnering businesses, their competitors, government regulations possibly being friendlier to environment at the same time.

In other words it shows that ICT can be used to forecast demand for a product, order the necessary raw materials, establish production schedules, track inventory, allocate people, allocate costs, and project key financial measures. Similarly automating the supply chain is done by integrating ERP systems with other types of applications, such as e-commerce, and even with the computer networks of suppliers and customers (Answers, 2008). Another important benefit is that if appropriately used it may allow the company to replace complex computer applications with a single integrated system.

However, we should be aware of the draw-back pints of these systems, starting from the fact that they tend to be large, complicated, expensive and fast replaceable by more up-to-date systems. Implementation requires an enormous time commitment from a company's information technology department or outside professionals (Answers, 2008). This is because resource use systems affect most major departments in a company leading to changes in many business processes.

Thus, if carefully considered, analysed and adopted, all this alternative resource use systems, or types of ICT will be able to enhance the long-term productivity of the resource base and improve the long-term wealth and well-being of ICs by enabling the integration of, and access to, what has been called “organizational memory” and finally supporting managerial decision making (Poulymenakou at al, 2002). This will be shown in a deeper elaborated way in the following sections of this essay

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^[1] The figure 1 is adopted from my team-work in the final year assignment studding at the University for Business and Technology, Prishtina, Kosova. More details about our group available at: http://groups.yahoo.com/group/miscommunity/messages/101?viscount=100